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Who are the winners and losers from the Budget?

Some people may feel better off following the Budget, while others may have less of a reason to be cheerful.

Published
Chancellor Philip Hammond

The Budget will make some people’s wallets feel a bit more substantial, while others may be left disappointed.

Here is a look at some of the Budget’s winners and losers:

Winners:

– People struggling to access affordable credit.

Some borrowers end up paying the “poverty premium” to take out credit as they struggle to access mainstream loans – but the Budget has unveiled plans that could help them.

The Government, working with leading debt charities and the banking industry, will launch a feasibility study to help design a pilot for a no-interest loans scheme early next year.

Budget graphic
(PA Graphics)

– First-time buyers.

Measures announced include an extension of stamp duty relief for first-time buyers purchasing shared ownership properties. From April 2021, a new Help to Buy equity loan scheme will run for two years before closing in March 2023.

– Workers. 

From April 2019 the National Living Wage will increase from £7.83 an hour to £8.21. The Government has said this will benefit around 2.4 million workers, and is a £690 annual pay rise for a full-time worker.

– People liable for income tax. 

The personal allowance – the amount people can earn before they have to start paying income tax – will increase by a further £650 in April 2019 to £12,500. The increase will come a year earlier than planned, and will be maintained in 2020. This means a basic rate taxpayer will pay £1,205 less tax in 2019-20 than in 2010-11.

Meanwhile, the amount people will have to earn before they pay tax at 40% will increase from £46,350 to £50,000 in April 2019. This means that in 2019-20, there will be nearly one million fewer higher rate taxpayers than in 2015-16.

Budget graphic
(PA Graphics)

– Motorists. 

In 2019, fuel duty will remain frozen for the ninth year in a row, saving the average driver £1,000 since 2010. Road users blighted by potholes in their area may also get some relief – as local authorities will receive £420 million to fix potholes on roads and renew bridges and tunnels, and £150 million is available to improve local traffic hotspots such as roundabouts.

– Drinkers of beer, cider and spirits. 

The cost of a pint of beer will be 2p lower than if duty had risen by inflation. The freeze also amounts to a saving of 1p on a pint of cider and a 30p on a bottle of scotch or gin.

As well as bringing cheer to consumers, the industry is also toasting the announcement.  The British Beer & Pub Association has said it will save brewers, pubs and pub-goers £110 million.

Losers:

– Nuisance callers. 

As part of efforts to tackle nuisance calls, National Trading Standards will receive further funding to extend a project providing telephone call blocking technology to vulnerable people.

Cold calling is a common method used by fraudsters to trick people into handing over their pension money. The Government said it will shortly be implementing legislation to make pensions cold calling illegal.

– Isa savers hoping to be able to put more away.

The adult Isa annual subscription limit for 2019-20 will remain unchanged at £20,000. But for child Isa savers, the annual subscription limit for Junior Isas for 2019-20 will be uprated to £4,368.

– Smokers.

Duty rates on all tobacco products will increase by two percentage points above RPI inflation until the end of this Parliament, the Budget documents said.

Budget 2018
Bad news for smokers (Martin Rickett/PA)

– Technology giants. 

Online tech giants are set to be slapped with a new “digital services” tax amid measures aimed at helping the high street. A 2% UK digital services tax will come into force in April 2020 and is expected to raise £400 million a year.

It will only be paid by profitable companies which generate at least £500 million a year in global revenues, and applies to income which firms generate through providing search engines, social media platforms and online marketplaces.

– Wine lovers.

While beer fans may be happy with Monday’s Budget, wine drinkers may have less reason to raise a glass. The Wine and Spirits Trade Association (WSTA) has estimated that the duty rise by inflation imposed on wine will hike the price of a bottle by 7p on still wines and by an extra 9p on sparkling and fortified wine.

Andy Fyffe, pubs lead at EY, said: “With wine prices already impacted by the decline in sterling, adding 7p to a bottle of still wine and 9p to a bottle of sparkling may encourage wine drinkers to try another tipple of choice.”

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